The Korea National Oil Corporation (KNOC) announced on September 29 that its subsidiary Harvest Operations Corp’s drilling confirmed a minable reserve of 5.9 million barrels of crude oil in the Canadian mining region of Royce.
Minable reserves mean deposits that can be drilled with the current technological and economical means. The oil well is in the northwestern Canadian mining area of Royce in the province of Alberta, located in the southern part of the Cecil county well, where Harvest is producing oil.
Well exploration started early in September, and the company proceeded with production testing of the well on September 20. It succeeded in the daily production of approximately 800 barrels of oil and gas.
KNOC anticipates that they will be able to obtain a minable reserve of at least 5.9 million barrels with the discovery of the new oil layers in the region, since 30 or 40 additional drilling sites could be developed. The total value is estimated to be worth around US$470 million.
The northwestern mining area of Royce is expected to exceptionally economical, since, at just 1,200m deep, the well is low-cost.
The state-run energy company said that it is aiming to have both high profitability and a future growth engine with Koreans' massive investment in high-quality core assets that Harvest retains. KNOC added that it intends to improve its financial structure by streamlining non-core assets.